The diversity of software already out there for VR is proof of a bubble; variety is great, but even if VR succeeds overall, many creators will be left behind

VR is the biggest and most exciting thing on the industry's horizon. Whether that's actually true or not - and the truth is, as ever, probably a little more complex than the headline - that was the message that the almost 300,000 consumers who attended the Tokyo Games Show last week got loud and clear. Between an enormous area devoted solely to VR experiences in one of the halls, the large VR focus on the stands of companies like Sony and Capcom, and even the content of the developer sessions on the show's business days, wall to wall VR was the order of the day. It's not just TGS, either; for showcase events around the world, this year has been the year when VR headsets multiplied and proliferated across expo floors. Nobody yet knows what consumer response to VR will be, but it's increasingly, nerve-wrackingly obvious how high the industry's expectations have been pitched.

What was most eye-opening about the array of VR software on display at TGS was its diversity. From the fully expected shooting games, locked room style puzzle games and, of course, Tetsuya Mizuguchi's gloriously revived rhythm action title Rez, the VR software on display branched out in all sorts of different directions. You could go fishing in VR, or go on a date in VR, or do all sorts of mundane, everyday activities in VR (some with an entertaining, tongue in cheek twist, many absolutely po-faced simulations). There was even VR pornography, of a somewhat unpleasant variety.

"Make no mistake; there will be blood. The level of investment and employment in VR isn't sustainable even if all of the VR platforms outperform expectations in the coming year..."

That degree of variety is a good thing, in some regards, but with all of it there's a sense of doing things because they're possible, not because anyone actually wants them. Perhaps people do want VR fishing, cooking and dating; I'm sure many people want to try out VR porn, though less convinced that it'll actually be as popular as your lurid teenage ideas about what you'd do with access to a Holodeck might suggest. At the moment, though, this is an entire industry flinging mud in the hope that some of it will stick - the most extraordinary part being that the wall they're flinging at hasn't even been built yet.

VR devices are, of course, available to consumers. You can buy a VR headset for a very high-end PC right now, and a slightly shoddy experience is also available by clipping certain smartphones into VR headset cases. The installed base, however, remains tiny, and the high barriers to entry mean that it may be a number of years before this represents a viable market for major titles. The great white hope, PSVR, will be far more accessible - but isn't out yet, and will be heavily supply constrained at the outset.

So all of this experimentation is really targeting a market that doesn't quite exist yet and won't scale up for quite some time. That's why it's unusual to see so many developers trying to split away from the beaten track and try different things; because there isn't really a beaten path yet. Nobody knows what software will be successful in VR, or even what business models are going to work. When you look at the diversity emerging in VR software, it's worth bearing in mind the enormous investment of venture capital this represents; Facebook's investment in Oculus opened VC floodgates in VR, creating huge speculative investments and quite a lot of employment. Now, before the market even coalesces, many creators are trying to find speculative niches that might let them sidestep the bloodbath they sense on the way.

Make no mistake; there will be blood. The level of investment and employment in VR isn't sustainable even if all of the VR platforms outperform expectations in the coming year; there's so much software, so many different bets going in so many different directions, that even an unqualified success for VR as a whole would still see some investors lose their shirts and some developers lose their jobs. That's a classic investment bubble - one which has so far outstripped the reality of the potential market that no level of real-world success can stop it from popping. Success would, however, mean that there would be winners among the losers; success is not, however, guaranteed. We still simply don't know whether a significant portion of consumers are willing to slip on VR headsets in their own homes (rather than as a novelty at a gaming expo) and buy games to play on them. The market may be small, in which case this bubble pop will hurt all the more.

How have we ended up at this juncture, with so many eggs in this one, untested basket? VC investment flooding into the sector after Facebook's move is definitely a major factor, but there are others. One crucial element, I believe, is that VR's timing is exactly right (or wrong, depending on how you look at it). It is arriving just as the enthusiasm for the opportunities of mobile and (to a lesser extent) PC indie software is fading. Mobile has become a platform where only the biggest, best-funded titles can succeed - more closed off now in practical terms, despite its supposedly open App Store models, than AAA publishing was in the past. PC indie still offers much potential, but here, too, the sheer volume of software, something of a race to the bottom in pricing and a variety of problems with the dominant Steam storefront have left many developers disillusioned and hoping to leap onto the next big thing. In this context, VR becomes a land of opportunity; a gold rush has been triggered, with developers all hoping to stake early claims, even if nobody is sure how much gold, if any, is actually in them thar hills.

"One important thing to bear in mind, though - now, and when the inevitable headlines about failed VR projects and shuttering VR studios start to roll in through late 2016 and 2017 - is that this era's VR is not just a fad"

Risk, of course, is part of any business - and doubly so for any creative business. Having a lot of businesses trying out bold new ideas in an untested area isn't a problem, it's a feature of functioning market capitalism. It only becomes a problem when the risks aren't being effectively controlled; when investors overheat a sector by incautiously throwing too much money at something they don't really understand, and the whole thing is blown up further still by an influx of developers fleeing adverse conditions on other platforms. Then you end up with the VR situation as it stands today. Lots of money that won't be recouped. Lots of jobs that won't be stable. Multiple, fragmented platforms, not all of which can survive. Most of all, lots of games - tons and tons of games - that are already creating a discoverability problem on platforms that don't even really exist yet.

When the VR bubble bursts, it's going to hurt in a number of ways. It's going to hurt the ability of game-related companies to attract venture capital, at least for a few years. It's going to put some studios out of business and force others to downsize. It's probably going to hurt consumer confidence in the sector to a degree, and in a worst case scenario, might fuel a perception of this era of VR as being another resurgence of the cyclical virtual reality fad.

One important thing to bear in mind, though - now, and when the inevitable headlines about failed VR projects and shuttering VR studios start to roll in through late 2016 and 2017 - is that this era's VR is not just a fad. The technology which enables consumer VR, in terms of low-cost, high-resolution, high refresh rate display panels, low-cost, high-power GPUs and new generations of extremely fast and accurate imaging sensors and accelerometers, is going to change how we interact with technology forever. It might not come about in quite the way the architects of 2016's VR headset launches imagine (I for one am increasingly convinced that VR is merely a special use case of, and a stepping stone towards, high quality AR), but it will happen, and soon. Even if the fallout from VR's inability to live up to its sky-high commercial expectations is very tough, the technology itself - both hardware and software - is proven, and important, and has come on in leaps and bounds through this tough infancy.

We'll get our VR/AR revolution. Just be ready for a very, very bumpy ride along the way. Getting the headsets launched and available to consumers is only the beginning of a tough journey with an uncertain destination.

Sign up for The VR & AR newsletter and get the best of GamesIndustry.biz in your inbox.

I am really sick of hearing about how VR is the next big thing. 'The new mobile'. What exactly is there to stop it just being motion-controllers or applewatches 2.0?

What exactly are the use cases for VR? What is the value it delivers vs cost? Has any thought been given to how ordinary people (who don't live in some sort of nerd-superiority-world) would live with these devices?

I hope to hell these developers ALL have a fail-safe handy in the form of "flat" versions of these games so any gamers without buckets of cash to burn can buy and play them. Top quality VR is simply too expensive for the general consumer to buy into now, and even when the entry level price eventually drops to what analysts think is "reasonable," I'd bet that half-price on a Vive is still going to be too much for some.

That said, YES. Entertainment and other applications for VR and AR into the future? Wonderful, especially when they get people doing things and going places they haven't been before. Bring it, I say.

But let's not pretend that at the moment and into the next few years, it's a simple case of who has the money to spend on the tech and who doesn't. Most consumers fall into that "doesn't" box and no amount of chipper evangelizing can get them to commit to dropping 2 grand on a new PC, a set of glasses (ONE set) and a bunch of games, some of which may be shorter than a long lunch break.